I use this reward system in my class and it works great!
I post the words on the board. I print them and laminate them. Then I can color in with Expo Markers and wipe it off once the class fills up the reward.
This method is a used for whole class rewards. When students behave they earn a letter at the end of class. (I teach middle school so we switch classes.) I have all of the words cut up into a bag, which stays in my desk. I choose a student to draw a letter out of the bag. Once the letter is drawn, the students vote as a class which reward they want to color in. It is a lot of fun and it motivates students to behave!
*Scrabble because I teach ELA!